EXHIBIT 10.2
FORM OF
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ADMINISTRATIVE SERVICES AGREEMENT (GARC II)
Dated as of September 1, 1998
between
GENERAL AMERICAN RAILCAR CORPORATION II
and
GENERAL AMERICAN TRANSPORTATION CORPORATION,
as Manager
Tank Cars and Covered Xxxxxx Cars
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TABLE OF CONTENTS
Section 1. Administrative Services....................................... 2
Section 2. Compensation of the Administrator............................. 3
Section 3. Term of Agreement............................................. 4
Section 4. The Administrator's Liability................................. 4
Section 5. Miscellaneous................................................. 4
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ADMINISTRATIVE SERVICES AGREEMENT (GARC II)
THIS ADMINISTRATIVE SERVICES AGREEMENT (GARC II) (this "Agreement"), dated
as of September 1, 1998, is made and entered into between General American
Transportation Corporation, a New York corporation (together with any successor
administrator, the "Administrator"), and General American Railcar Corporation
II, a Delaware corporation (the "Company"). Capitalized terms used in this
Agreement and not otherwise defined herein shall have the respective meanings
assigned thereto in that certain Collateral Agency and Intercreditor Agreement
dated as of September 1, 1998 among the Company, The First National Bank of
Chicago, as Collateral Agent, [BUSINESS TRUST], by Wilmington Trust Company, not
in its individual capacity but solely as trustee under the Trust Agreement (GARC
II 98-A), as Initial Owner Trustee (GARC II 98-A), [BUSINESS TRUST], by
Wilmington Trust Company, not in its individual capacity but solely as trustee
under the Trust Agreement (GARC II 98-B), as Initial Owner Trustee (GARC II
98-B), [BUSINESS TRUST], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (GARC II 98-C), as
Initial Owner Trustee (GARC II 98-C), The First National Bank of Chicago, as
Initial Indenture Trustee (GARC II 98-A), The First National Bank of Chicago, as
Initial Indenture Trustee (GARC II 98-B), The First National Bank of Chicago, as
Initial Indenture Trustee (GARC II 98-C), General American Transportation
Corporation, as Manager and General American Transportation Corporation, as
Insurance Manager (the "Intercreditor Agreement").
W I T N E S S E T H
WHEREAS, the Company has acquired from General American Transportation
Corporation, a New York corporation ("Lessee Parent"), (i) certain railroad tank
cars and covered xxxxxx cars, and (ii) all of Lessee Parent's right, title and
interest in and to the lease agreements respecting such railcars in which Lessee
Parent is the lessor, such lease agreements being with customers of Lessee
Parent;
WHEREAS, the Company has sold the Equipment to [Business Trust], [Business
Trust] and [Business Trust], in each case by Wilmington Trust Company, as Owner
Trustee under three separate Trust Agreements, each dated as of September 1,
1998, with the Owner Participants therein named (such Owner Trustees under each
Trust Agreement being herein referred to collectively as the "Owner Trustees"
and, individually, as an "Owner Trustee"), and the Owner Trustees have
simultaneously leased the Equipment to the Company pursuant to the terms of
three separate Equipment Lease Agreements, each dated as of September 1, 1998
(collectively, the "Leases" and, individually, a "Lease"); and
WHEREAS, to enable the Company to carry out its corporate functions,
Administrator has agreed to furnish clerical and bookkeeping services, prepare
financial statements and tax returns, provide office space and perform other
ancillary services for the Company;
[Administrative Services Agreement (GARC II)]
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Company and the Administrator hereby agree as follows:
Section 1. Administrative Services.
The Administrator hereby agrees to provide the following administrative
management services to the Company:
(a) designate one or more individuals who are directors, officers or
employees of the Administrator and who are available to serve, from time to
time, as directors of the Company;
(b) upon request by the Board of Directors of the Company, designate
one or more individuals who are directors, officers or employees of the
Administrator to serve, from time to time, as officers of the Company;
(c) through directors, officers and employees of the Administrator who
are directors or officers of the Company;
(i) furnish the Company with ordinary clerical and bookkeeping
services;
(ii) take such actions on behalf of the Company as are necessary
or desirable for the Company to remain organized in its jurisdiction of
incorporation and qualified (in those foreign jurisdictions in which it
becomes qualified) and to carry out its business, including, without
limitation, the filing of such reports and payment of such fees and
expenses as may be required;
(iii) maintain the general ledger of the Company, and on a
timely basis, and in cooperation with the Manager acting pursuant to the
Management Agreement, prepare the financial statements and tax returns of
the Company, subject to year-end audit, in accordance with generally
accepting accounting principles;
(iv) direct and, in cooperation with the Manager acting pursuant
to the Management Agreement, prepare the auditing staff of the Company's
independent accountants to facilitate the timely completion of the year-end
audit review;
(v) provide, or cause to be provided, notice to each of the
Rating Agencies and the Collateral Agent in the event that:
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[Administrative Services Agreement (GARC II)]
(A) any action, suit or proceeding is pending against the
Company;
(B) any amendment occurs with respect to the Certificate of
Incorporation or By-Laws of the Company;
in each of the above instances, such notice shall be provided by the
Administrator within 30 days of the Administrator's obtaining knowledge of
such event; and
(vi) defend, at the direction of the Company's Board of
Directors, any action, suit or proceeding to cause a substantive
consolidation of the assets and liabilities of the Company with the
Administrator, the Manager, the Parent or any other Person.
(d) provide separately identified office space, stationery and
telephone numbers and such other reasonable ancillary services as may be
necessary for the Company to carry out its obligations under Sections 1(a)
through (c) hereof, including telecopying, duplicating and word processing
services;
(e) provide such other services as shall be necessary or appropriate
to permit or enable the Company to comply with its obligations under the Leases
and the other Operative Agreements and as are incidental to the foregoing or as
the Company and the Administrator may agree; provided such services do not
conflict with the services to be provided by the Manager pursuant to the
Management Agreement; and
(f) provide notice to each of the Rating Agencies in the event that
any Independent Director is removed or appointed.
In providing the services under this Section 1 and as otherwise provided
under this Agreement, the Administrator agrees to comply with the Services
Standard and will not knowingly take any actions on behalf of the Company which
would cause the Company to be in violation of any federal law of the United
States of America or any law of any state, territory or domicile of the United
States.
Section 2. Compensation of the Administrator.
The compensation to the Administrator for the performance of its services
hereunder shall be included in the Base Component under the Management Agreement
so long as the Administrator remains as the Manager thereunder. Such Base
Component is intended, so long as the Administrator is acting as Manager under
the Management Agreement, to include all direct costs and expenses relating to
the performance by the Administrator of its services, duties and obligations
under this Agreement. In the event that the Administrator is terminated as
Manager under the Management Agreement, the Company and the Administrator shall
agree upon a
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[Administrative Services Agreement (GARC II)]
mutually acceptable compensation arrangement based on the then current market
rate for such services. In addition to the foregoing, the Company agrees to
reimburse the Administrator for any out-of-pocket costs incurred in connection
with any financial audit of the Company.
Section 3. Term of Agreement
This Agreement shall commence on September 1, 1998 and shall be terminable
by the Administrator or the Company upon ninety (90) days written notice after
the Management Agreement is no longer continuing in effect (as it may be renewed
or otherwise extended).
Section 4. The Administrator's Liability
The Administrator and its directors, officers and employees who serve as
directors and officers of the Company assume no liability for anything other
than to render or stand ready to render the services specifically called for
herein, and neither the Administrator nor any of its directors, officers,
employees or subsidiaries or Persons controlling, controlled by or under common
control or affiliated with the Administrator shall be responsible for any action
of the Company under any of the Company Documents or Operative Agreements to
which the Company is a party. Neither the Administrator nor any director,
officer or employee of the Administrator who serves as a director or officer of
the Company shall be liable for or shall have any obligation with regard to any
of the liabilities, whether direct or indirect, absolute or contingent, of the
Company in connection with such Company Documents or Operative Agreements,
instruments or documents. The directors, officers and employees of the
Administrator who serve as directors and officers of the Company shall act in
accordance with the standards of conduct imposed on officers and directors under
Delaware law. Notwithstanding anything to the contrary contained in this Section
4, the Administrator hereby agrees that if it or any of its officers, employees,
directors or agents shall fail to observe any of its obligations under this
Agreement and as a result of such failure the Company incurs (whether as a
result of any action so taken or omitted to be taken in violation of terms
hereof) any costs, expenses, actions, suits, judgments, demands, damages, losses
or liabilities (including, without limitation, reasonable attorneys' fees and
expenses) (collectively, the "Indemnified Expenses"), then the Administrator
shall indemnify and hold harmless the Company for such Indemnified Expenses;
provided, however, that the Administrator shall only be liable for any such
Indemnified Expense to the extent arising in connection with, or as a result of,
its or its officers', employees', directors' or agents' negligence or willful
misconduct or its or their failure to comply with the Services Standard. The
indemnities set forth in the preceding sentence shall survive the termination of
this Agreement.
Section 5. Miscellaneous
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[Administrative Services Agreement (GARC II)]
(a) Table of Contents and Headings. The table of contents and
descriptive headings of the several subsections and articles of this Agreement
are inserted for convenience only and do not constitute part of this Agreement.
(b) The Administrator as Independent Contractor. All of the
functions, duties and services performed by the Administrator under this
Agreement shall be performed by the Administrator as an independent contractor
and not as agent of the Company.
(c) Relations Among Parties. The parties intend, in entering into
this Agreement, that the Administrator is an independent contractor and that no
partnership relationship exists among the Administrator and the Company; that
the Administrator does not have the authority to act as agent of, or partner or
co-venturer with, the Company except to the extent specifically provided herein;
that the Administrator, in its capacity as such, does not, except as
specifically set forth in this Agreement, have the authority to bind the
Company; that the Company, as such, does not have liability for the acts of the
Administrator; and that any fees or other compensation payable by the Company to
the Administrator are ordinary and necessary business expenses of the Company.
(d) Governing Law. This Agreement shall be in all respects governed
by and construed in accordance with the laws of the State of New York, including
all matters of construction, validity and performance, without regard to
principles of conflicts of laws.
(e) Notices. Any notice, certificate, document, acceptance or report
required or permitted to be given by either party hereto to the other party
shall be in writing and shall be deemed delivered when received, or when
delivered personally, by facsimile transmission or reputable air courier,
addressed as follows:
If to the Company: General American Railcar Corporation II
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Re: GARC II
Facsimile: (000) 000-0000
Conf. No.: (000) 000-0000
If to the Administrator: General American Transportation Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Re: GARC II
Facsimile: (000) 000-0000
Conf. No.: (000) 000-0000
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[Administrative Services Agreement (GARC II)]
or addressed to either party at such other address as such party shall hereafter
furnish to the other party by written notice as provided above.
(f) Entire Agreement; Amendment, Waivers. This Agreement constitutes,
with respect to the subject matter hereof, the entire agreement of the parties
and supersedes and cancels all prior agreements, discussions, negotiations,
memoranda or correspondence with respect to such subject matter, and may not be
amended orally, but only by an agreement in writing signed by the party against
which the enforcement of such amendment is sought. The failure of either party
hereto at any time or times to require performance of any provision hereof shall
in no manner affect its right at a later time to enforce the same. No waiver by
either party hereto of the breach of any term or agreement contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any breach,
or a waiver of the breach of any other term or agreement contained herein. The
parties hereto reserve the right to amend, modify, supersede and cancel this
Agreement, or waive the terms or conditions hereof, without the consent of any
other person or entity.
(g) Assignment. (i) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Administrator will not, without the prior
written consent of the Collateral Agent, assign any of its rights
hereunder, except as provided herein, in the Intercreditor Agreement and in
the Participation Agreement.
(ii) The Administrator and the Company hereby confirm that
concurrently with the execution and delivery of this Agreement, (i) the
Company has executed and delivered the Intercreditor Agreement which, among
other things, assigns as collateral security and grants a security interest
in favor of the Collateral Agent in the rights of the Company hereunder for
the benefit of, among others, the Owner Trustees and (ii) each of the Owner
Trustees has executed and delivered to the related Indenture Trustee an
Indenture which assigns as collateral security and grants a security
interest in favor of such Indenture Trustee in the rights of such Owner
Trustee under the Intercreditor Agreement, all as more explicitly set forth
in the Intercreditor Agreement and the Indentures. The Company agrees that
it shall not otherwise assign or convey its right, title and interest in
and to this Agreement except as expressly permitted by and subject to the
provisions of the Participation Agreements.
(h) Further Assurances. If at any time the parties hereto shall
consider or be advised that any further assignments, conveyances or assurances
are necessary or desirable to carry out the provisions hereof and the
transactions contemplated hereby, the parties hereto shall execute and deliver
any and all documents, instruments, contracts, leases, assignments and
assurances and do all things necessary or proper to carry out fully the
provisions hereof.
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[Administrative Services Agreement (GARC II)]
(i) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(j) Severability. Any provision of this Agreement that may be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof so long as the economic or legal
substance of the transactions contemplated thereby is not affected in any manner
adverse to any party. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the fullest extent permitted by law, the parties hereby
waive any provision of law that renders any provision of this Agreement
prohibited or unenforceable in any respect. In addition, in the event of any
such prohibition or unenforceability, the parties agree that it is their
intention and agreement that any such provision which is held or determined to
be prohibited or unenforceable, as written, in any jurisdiction shall
nonetheless be in force and to the fullest extent permitted by the law of such
jurisdiction as though such provision had been written in such a manner and to
such an extent as to be enforceable therein under the circumstances.
(k) No Petition in Bankruptcy. The Administrator hereby agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Equipment Notes and Pass Through Certificates, the Administrator
will not institute against, or join any other Person in instituting against, the
Company an action in bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or similar proceeding under the laws of the United
States or any state of the United States.
* * *
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[Administrative Services Agreement (GARC II)]
IN WITNESS WHEREOF, the Company and the Administrator have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
GENERAL AMERICAN RAILCAR CORPORATION II
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
GENERAL AMERICAN TRANSPORTATION CORPORATION
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
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